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Marketing

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First it is a philosophy, an attitude, a perspective, or a management orientation that stresses customers satisfaction

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Marketing facet 2

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Organization function and a set of processes used to implement this philosophy

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Marketing definition

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The activity, set of institutions and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

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What marketing entails

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Processes that focus on delivering value and benefits to customers, not just selling goods, services, and ideas

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Exchange defined

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People giving up something in order to receive something else they would rather have.

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An exchange can only take place if the following conditions exist

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1. There must be at least two parties 2. Each party has has something that might be of value to the other party 3. Each party is capable of communication and delivery 4. Each party is free to accept or reject the exchange offered 5. Each party believes it is appropriate or desirable to deal with the other party

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Marketing management philosophies four

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Production orientation Sales orientation Market orientation Societal marketing orientation

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Production orientation

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A philosophy that focuses on the internal capabilities of the form rather than on the desires and needs of the marketplace

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Sales orientation

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The belief that people will buy more goods and service if aggressive sales techniques are used and that high sales result in high profits

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Marketing concept

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The idea that the social and economic justification for an organization existence is the satisfaction of customers wants and neeeds while meeting organizational objectives

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Marketing orientation

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A philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customers decision to purchase a product, it is synonymous with the marketing concept

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Marketing concept

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Satisfaction of customer wants and needs while meeting organizational objectives

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Marketing concept includes

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-Focusing on customers wants and needs so that the organization can distinguish its product(s) from competitors' offerings -interesting all the organizations activities including production to satisfy customers wants -achieving long term goals for the organization by satisfying customer wants and needs legally and responsibly

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Market oriented

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Obtaining information about customers, competitors, and markets; examining the information from a total business perspective; determining how to deliver superior customer value and implementing actions to provide value for customers

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Societal marketing orientation

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The idea that an organization exists not only to satisfy customers wants and needs and to meet organizational objectives but also to preserve or enhance individuals and society's long term best interests

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Who is in charge

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Customers

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Organizational focus sales oriented firm

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Onward looking, focusing on selling what the organization makes rather than making what the market wants

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Organizational focus marketing oriented

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Put customers at the center of their business in ways most companies do poorly or not at all

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Customer value

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The relationship between benefits and the sacrifice necessary to obtain those benefits

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Customer satisfaction

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customers evaluation of a good or service in term of whether it has met their needs and expecitations

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Relationship marketing

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A strategy that focuses on keeping and imposing relationships with current customers

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Empowerment

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Delegation of authority to solve customers problems quickly - usually by the first person the customer notifies regarding the problem

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Team work

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Collaborative efforts of petiole to accomplish common objectives

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What is the firms business three important advantages

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1. Ensures that the firm keeps focusing on customers and avoids becoming preoccupied with good services of the organizations internal needs 2. Encourages innovation and creativity by reminding people that there are many ways to satisfy customers wants 3. It simulates an awareness of change I. Customers desires and preferences so that product offerings are more likely to remain relevant

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Those to whom the product is directed (sales oriented organization)

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Targets it's products at "everybody" or "the average customer"

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Those to whom the product is directed (market oriented organization)

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Aims a specific groups of people.

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Customer relationship management

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Company wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups

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On demand marketing

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Delivering relevant experiences, integrated across both physical and virtual environments, throughout the customers decision and buying process.

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The firms primary goal (sales oriented organization)

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Seeks to achieve profitability through sales volume and tries to convince potential customers to buy

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The firms primary goal (market - oriented organization)

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To make profit by creating customers value providing customer satisfaction, and building long term relationships with customers

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Tools the organization uses to achieve goals (sales oriented organizations)

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seek to generate sales volume through intensive promotional activities, mainly personal selling and advertising

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Tools the organization uses to achieve goals (sales oriented organizations)

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Recognize that promotion decisions are only one of four basic marketing mix decisions that must be made: product decisions, place (or distribution) decisions, promotion decisions, and pricing decisions

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Strategic planning

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The managerial process of creating and maintaining a fit between the organizations objectives and resources and the evolving market opportunities

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Strategic marketing management addresses what two questions

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1. What is the organizations main activity at a particular time? 2. How will it reach its goals

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Strategic business unit (SBU)

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A subgroup of single business or collection of related businesses within the larger organization

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Strategic business unit (SBU) characteristics

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- a distinct mission and a specific target market -control over its resources -it's own competitors - a single business or a collection of related businesses - plans independent of the other SBUs in the total organization

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Market penetration

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A marketing strategy that tries to increase market share among existing customers

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Market development

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A marketing strategy that entails attracting new customers to existing products

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Product development

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A marketing strategy that entails the creation of new products for present markets

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Diversification

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A strategy of increasing sales by introducing new products into new markets

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Portfolio matrix

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A tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate

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The portfolio matrix breaks SBUs into four categories

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1. Star 2. Cash cow 3. Problem child (question mark) 4. Dog

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Star

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In the portfolio matrix, a business unit that is fast growing market leader

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Cash cow

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In the portfolio matrix, a business unit that generates more than it needs to maintain its market share

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Problem child (question mark)

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In the portfolio matrix, a business unit that shows rapid growth but poor profit margins

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Dog

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In the portfolio matrix, a business unit that has low growth potential and a small market share

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Allocation of future resources for SBUs basic strategies

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1. Build 2. Hold 3. Harvest 4. Divest

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Planning

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The process of anticipating future events and determining strategies to achieve organizational objectives in the future

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Marketing planning

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Designing activities relating to marketing objectives and the changing marketing environment

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Marketing plan

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A written document that acts as a guidebook of marketing activities for the marketing manager

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Creation and implementation of a complete marketing plan will allow the organization to?

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Achieve marketing objectives and succeed

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The marketing plan is only as good as ....

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The information it contains and the effort, creativity, and thought that went into its creation

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Business mission statements that are stated too narrowly suffer from

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Marketing myopia

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Marketing myopia

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Defining a business in terms of goods and services rather than in terms of the benefits customers seek

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Mission statement

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A statement on the firms business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions

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What question does a mission statement answer?

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What business are we in?

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The way a firm defines the business mission

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Profoundly affects the firms long run resource allocation, profitability, and survival

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A situational analysis is sometimes referred to as

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SWOT analysis

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SWOT analysis

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Identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)

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Environmental scanning

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Collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan

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Competitive advantage

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A set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition

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Environmental scanning helps

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Identify market opportunities and threats

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Six most often studied macroenvironmental forces are

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Social Demographic Economic Technological Political and legal Competitive

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Cost competitive advantage

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Being the low cost competitor in an industry while maintaining satisfactory profit margins

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Experience curves

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Curves that show cost declining at a predictable rate as experience with a product increases

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Product/ service differentiation competitive advantage

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The provision of something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition Examples include brand name (Lexus), a strong dealer network (Caterpillar for construction work), product reliability (maytag appliances), image (Neiman Marcus in retailing), or service (Zappos).

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Cost can be reduced in what was

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Experience curves Efficient labor No-frills goods and services Government subsidies Product design Reengineering Production innovations New methods of service delivery Pg 23

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Niche competitive advantage

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The advantage received when a firm seeks to target and effectively serve a small segment of the market Pg 24

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Sustainable competitive advantage

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An advantage that cannot be copied by the competition Pg 24

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Marketing objectives should be

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Realistic Measurable Time specific Compared to a benchmark Pg 25

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Marking objective

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A statement of what is to be accomplished through marketing activities Pg 25

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Marketing strategy

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The activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets Pg 26

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Market opportunity analysis (MOA)

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The description and estimation have of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these market segments Pg 26

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Marketing mix (four Ps)

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A unique blend of product, place (distribution), promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market Pg 26

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Four Ps of marketing mix

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Product Place Promotion Pricing strategies Pg 26-27

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Most flexible of the four Ps

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Pricing Pg 27

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Implementation

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The process that turns a marketing plan into actions assignments and ensures that the assignments are executed in a way that accomplishes the plan's objectives Pg 28

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Evaluation

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Gauging the extent to which the marketing objectives have been achieved during the specified time period Pg 28

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Control

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Provides the mechanism for evaluating marketing results in light of the plan's objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines Pg 28

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Marketing audit

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A thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organization Pg 28

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3 post audit tasks

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1. Profile existing weaknesses and inhibiting factors as well as the firm's strengths and the new opportunities available to it 2. Ensure that the role of the audit has been clearly communicated 3. Make someone accountable for implementing recommendations Pg 28 - 29

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Effective strategic planning requires

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Continued attention, creativity, and management commitment Pg 29

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Ethics

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Moral principles or values that generally govern the conduct of an individual or a group Pg 30

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Social control defined

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Any means used to maintain behavioral norms and regulate conflict Pg 30

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Behavioral norms

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Standards of proper or acceptable behavior Pg 30

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Several modes of social control that are important to marketing

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Ethics Laws Formal and informal groups Self-regulation The media The active civil society Pg 30 - 32

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Deontological theory

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Ethical theory that states that people should adhere to their obligations and duties when analyzing an ethical dilemma Pg 32

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Utilitarian ethical theory

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Ethical theory that is founded on the ability to predict the consequences of an action Pg 33

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Casuist ethical theory

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Ethical theory that compares a current ethical dilemma with examples of similar ethical dilemmas and their outcomes Pg 32

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People usually base their individual choices of ethical theory on....

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Their life experiences Pg 32

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Moral relativism

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An ethical theory of time and place ethics; that is, the belief that ethical truths depend on the individuals and groups holding them Pg 33

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Virtue

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A character trait valued as being good

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Morals

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The rules people develop as a result of cultural values and norms

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Morals are usually characterized as

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Good and bad and can also refer to conforming and deviant behaviors

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Three levels of ethical development

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Preconventional Conventional Postconventional Pg 35

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Preconventional morality

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Most basic level, childlike Calculating, self centered and even selfish Based on what will be punished or rewarded Pg 35

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Conventional morality

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Expectations of society Concerned with whether proposed action is Legal and how it will be viewed by others

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Postconvetional morality

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How they see and judge themselves Is it right in the long run? Might it do more harm that good?

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Factors that influence ethical decision making

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Extent of ethical problems within the organization Top management actions on ethics Potential magnitude of the consequences Social consensus Probability of a harmful outcome Length of time in between the decision and the onset of consequences Number of people affected Pg 35

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Code of ethics

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A guideline to help marketing managers and other employees make better decisions Pg 36

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Advantages of creating ethics guidelines

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- helps employees identify what their firm recognizes as acceptable business practices -effective internal control of behavior, which is more desirable than external controls such as government regulation -helps employees avoid confusion when determining whether there decisions are ethical -facilitates discussion among employees about what is right and wrong and ultimately leads to better decisions Pg 36

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Foreign corrupt practices act (FCPA)

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A law that prohibits us corporations from making illegal payments to public officials of foreign governments to obtain business right or to enhance their business dealings in those countries

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Corporate social responsibility (CSR)

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A business's concern for society's welfare

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Stakeholder theory

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Ethical theory stating that social responsibility is paying attention to the interest of every affected stakeholder in every aspect of a firms operation. Pg 38

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Stakeholders in a typical corporation

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Employees Management Customers The local community Suppliers Owners/stock holders Pg 39

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Pyramid of corporate social responsibility

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A model that suggests corporate social responsibility is composed of economic, legal, ethical, and philanthropic responsibilities and that a firm's economic performance supports the entire entire structure Pg 39

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Sustainability

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The idea that socially responsible companies will outperform their peers by focusing on the worlds social problems and viewing them as opportunities to build profits and help the world at the same time Pg 41

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Green marketing

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The development and marketing of products designed to minimize negative effects on the physical environment or to improve the environment Pg 43

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Cause related marketing

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The cooperate marketing efforts between for profit firm and a non profit organization Generates 7 billion annually Too many causes can lead to customer fatigue Pg 44

Mktg 10 Principles of marketing Lamb + Hair + mcdaniel – Flashcards

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